Scottish procurement policy handbook

3. Procurement function

Public bodies should have procurement arrangements which are appropriate for their buying needs. This can be through a public body’s own dedicated procurement function or a shared resource. Someone at an appropriately senior level relevant to the public body should have clear ownership of procurement and commercial matters.

Having the right procurement arrangements in place can, among other things, help a public body to achieve Best Value focusing on good governance and effective management of resources while achieving the best possible outcomes.

Role of the procurement function

The specific role of the procurement function can vary depending on the size and nature of a public body. Its general function is to:

• provide professional procurement expertise, advice and services
• ensure business needs are met through procurement activities
• contribute to the aims and objectives of the public body
• develop the supplier base, involving Small and Medium-sized Enterprises (SMEs), the third sector and supported businesses
• identify and manage supply risks
• identify opportunities where value can be added
• ensure that VfM is achieved
• develop, promote and implement procurement strategies and procedures
• identify and address training needs, using national/sectoral training contracts where appropriate
• co-ordinate the training and registration of Procurement Officers
• assess procurement competencies across the public body, using tools such as the national procurement competency framework
• collaborate and share information with relevant Procurement Centres of Expertise and the Scottish Government
• support national and regional objectives through procurement
• comply with all relevant legislation and policies
• promote the use of technology, including e-procurement, to improve cost efficiencies, for example minimising purchase-to-pay costs
• manage the relationship between the public body and the external marketplace on commercial matters, engaging with and researching the market
• determine requirements and specifications in collaboration with customers, the market and
• service users as relevant and appropriate
• manage competitions and contract awards
• ensure proportionate contract management is undertaken
• maintain a comprehensive contracts register
• determine governance required for delegated purchasing authority (DPA - the authority given to an individual to sign-off contracts/make purchases)
• measure and report performance of the function as appropriate
• encourage participation of users/feedback within relevant advisory groups (user intelligence groups).

Role of Procurement Officers

A Procurement Officer describes a member of staff who has written DPA. It is good practice for a public body to have governance in place to provide DPA to individuals to allow them to commit a public body to a contract for the purchase of goods, services or works and is completely separate from delegated budgetary authority. The key elements of the Procurement Officer’s role are:

• market analysis and initial market dialogue
• challenging the requirements of customers for best value and fitness for purpose, taking account of whole life costs and other issues such as sustainability
• identifying and engaging other subject experts as required (e.g. end user, legal, finance, equality, diversity, climate etc.)
• working with customers to carry out preliminary market engagement and co-design as appropriate
• working with customers to develop a specification which can attract market interest while stimulating competition and innovation
• developing a commodity/service strategy which considers existing and/or collaborative contracts
• advising customers on the most appropriate and effective route to market, considering all available options
• conducting and managing the full procurement process
• ensuring all procurement processes (tender, order from framework etc.) comply with legal and policy and the relevant public body’s internal governance obligations
• ensuring transparency throughout the bidding process, sharing all relevant information with interested suppliers
• ensuring procurement decisions are aligned with wider organisational objectives and policies
• supporting partnership working arrangements
• asking bidders for clarification on bids before the award of contracts when necessary
• finalising the contractual agreement and formal contract documentation
• maintaining a clear audit trail (including recording the contract on the public body’s contract register)
• giving feedback to bidders who have been successful and unsuccessful to promote improved performance in future
• ensuring adequate contract and supplier management arrangements are in place, as appropriate
• sharing knowledge to develop best practice
• conducting due diligence on suppliers
• managing and conducting contract modifications.

A Procurement Officer’s first point of contact for advice and support will be an appropriately senior person for the public body that they belong to. In addition, a public sector Procurement Officer can also contact the appropriate Procurement Centre of Expertise for further help:

• Scottish Procurement & Property Directorate: awards national and sectoral contracts on behalf of the Scottish Government, its Agencies and Non-Departmental Public Bodies
• Advanced Procurement for Universities and Colleges: awards contracts on behalf of the Higher and Further Education sector
• NHS National Procurement: awards contracts on behalf of the Health sector
• Scotland Excel: awards contracts on behalf of Scottish local authorities (councils).

Identifying organisational purchasing requirements

The role of identifying a public body’s procurement needs is not normally undertaken by a Procurement Officer. It normally falls to someone else within the public body, who should:

• establish clearly defined needs while ensuring there is appropriate consultation with users and their representative bodies
• ensure that the requirement takes account of the public body’s policy requirements and is aligned with organisational objectives
• ensure compliance with legal obligations related to what is being bought, e.g. environmental/health and safety legislation, the United Nations Convention on the Rights of the Child (UNCRC), equality legislation etc.
• prepare a business case where appropriate
• ensure that funding is in place
• identify key stakeholders to support co-design and preliminary market engagement as appropriate
• contribute to drafting the tender specification
• contribute to the development of the commodity/service strategy
• be involved throughout the life cycle of the procurement exercise from implementation to review to ongoing intelligence groups
• provide technical expertise and input to support the bid assessment process
• prepare the technical recommendation in any bid assessment report
• participate in bid evaluation panels or identify suitable subject matter experts to do so
• prompt payment of suppliers as per contract payment terms
• monitor and evaluate progress against Key Performance Indicators (KPIs) and work with supplier on continuous improvement
• flag any early warning signs of potential supplier failure to procurement colleagues.

Separation of roles

The roles of Procurement Officer and budget holder/approver should never be performed by the same person, and customers should not deal directly with bidders or potential bidders once a formal procurement process is underway without the full involvement of the Procurement Officer. Ideally, the technical aspects of a tender should not be evaluated and/or scored by a Procurement Officer, and the financial/commercial aspects must not be evaluated and/or scored by the customer scoring the technical aspects. Separating these roles can help protect a public body from the risk of improper practice and behaviour.

Any actual, potential, or perceived conflicts of interest must be declared. Public bodies must take appropriate measures to prevent, identify, and remedy conflicts of interest arising in the course of the procurement process to avoid any distortion of competition and to ensure equal treatment of all bidders.